· Gold prices inched lower on Monday, pressured by a firmer dollar, while investors awaited guidance from the U.S. Federal Reserve on when it is likely to start withdrawing its bond-buying program.
· Spot gold dipped 0.1% to $1,752.66 per ounce by 0050 GMT, while U.S. gold futures edged up 0.1% to $1,753.80.
· The dollar index hit a near one-month high, denting gold’s appeal for holders of other currencies.
· The Fed is expected to open the door to reducing its monthly bond purchases when it meets on Sept. 21-22, while tying any actual change to U.S. job growth in September and beyond.
· Bullion is viewed as a hedge against the inflation and currency debasement likely from widespread stimulus. The Fed’s tapering could tackle both those conditions, diminishing gold’s appeal.
· U.S. consumer sentiment steadied in early September, but consumers continue to have a bleak view of the outlook amid a stiff bout of inflation, a survey showed on Friday.
· The London Bullion Market Association (LBMA) said on Friday it had suspended its accreditation of a gold refinery in Kyrgyzstan for failing to meet its responsible sourcing standards.
· A pullback in domestic prices failed to revive physical gold demand in India last week, with jewelers banking on the upcoming wedding and festive season, while top consumer China saw an uptick in buying.
· Speculators raised their net long positions in COMEX gold by 3,856 contracts to 87,395 in the week to Sept. 14, data from the U.S. Commodity Futures Trading Commission showed.
· Silver fell 0.3% to $22.33 per ounce, having hit its lowest level since Nov 2020 earlier in the session.
· Platinum fell 0.1% to $940.39, while palladium gained 0.5% to $2,026.50.
· XAU/USD bears tease five-week low near $1,750, China, Fed eyed
Gold (XAU/USD) bears regain controls ahead of the key weekly events, down 0.36% intraday near $1,748 heading into Monday’s European session. In doing so, the yellow metal refreshes the five-week low, recently bouncing off the intraday bottom, amid the risk-off mood.
Despite banking holidays in Japan and China, Evergrande-linked equity woes and the pre-Fed caution weigh on the market sentiment, which in turn underpin the US Dollar Index (DXY) and weigh on gold prices. Also challenging the mood is the COVID-19 fears and concerns over the US stimulus, as well as the debt limit.
Looking forward, an off in China and Japan may trigger the metal’s corrective pullback near the short-term key support but the bearish view remains intact ahead of Wednesday’s Federal Open Market Committee (FOMC).
Technical analysis
Following that, August 09-10 lows near $1,723 and the $1,700 round figure will challenge gold bears ahead of directing the commodity prices to the yearly low near $1,687.
Alternatively, corrective pullback beyond the stated resistance line near $1,750 will aim for the latest peak surrounding $1,768 before heading towards the late August lows near $1,780.
It’s worth noting that the $1,800 and $1,822-23 may entertain bulls prior to highlighting the monthly top, also tested in July, near $1,834.
· Gold Futures: Look neutral/bearish near term
Open interest in gold futures markets shrank by around 1.1K contracts on Friday, partially reversing the previous build according to flash data from CME Group. In the same line, volume partially offset the previous daily build and dropped by around 74.2K contracts.
Gold: Further decline on the cards
· U.S. Treasury yields lower as investors look ahead to new Fed meeting
U.S. government debt prices were higher on Monday as investors gear up for a new Federal Reserve meeting.
At around 1.30 a.m. ET, the yield on the benchmark 10-year Treasury note dropped 6 basis points to 1.3633% and the yield on the 30-year Treasury bond fell 7 basis points to 1.9030%. Yields move inversely to prices.
· U.S. Senate's McConnell tells Yellen Democrats must raise debt ceiling themselves
McConnell and other senior congressional Republicans have vowed not to vote for an increase of the debt limit, instead urging Democrats to pass it on their own through a maneuver called reconciliation. McConnell has sought to block numerous parts of Biden's legislative agenda.
House Speaker Nancy Pelosi has said Democrats will not include a provision to raise the borrowing limit in a $3.5 trillion "reconciliation" spending measure they hope to pass this autumn.
Pelosi says the debt limit must be raised to pay for debt incurred under Republican former President Donald Trump, but has not said how this should be done. One possibility would be for Democrats to add a debt ceiling provision to a must-pass bill to keep the government running, expected at the end of September.
· France cancels defence meeting with UK over submarine row, sources say
France has cancelled a meeting between Armed Forces Minister Florence Parly and her British counterpart planned for this week after Australia scrapped a submarine order with Paris in favour of a deal with Washington and London, two sources familiar with the matter said.
· Australian PM departs for Quad meeting amid French submarine deal fallout
Australian Prime Minister Scott Morrison on Monday departed for Washington to meet with leaders of the Quad grouping amid criticism over his government’s decision to abandon a $40 billion submarine deal with France.
· Taiwan threatens to take China to WTO in new spat over fruit
· N.Korea warns U.S. risks 'dangerous nuclear arms race' over Australia subs
North Korea warned on Monday that the United States risked a dangerous nuclear arms race by providing submarine technology to Australia, criticising its "double standards" and vowing counter-measures.
· U.S. administers about 385.6 mln doses of COVID-19 vaccines –CDC
· New Zealand sees small increase in daily COVID-19 cases over weekend
· Sydney COVID-19 cases fall as curbs ease in virus hotspots
Reference: Reuters, CNBC, FXStreet
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